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Service Provider Business Models Drive “The Connected Home”

November 1, 2007 - 1 Comment

connected_home.jpgThe connected home is closer than we think. Believe it or not, it’s not a technology issue, in my opinion. I think that the bigger issue in terms of deploying home networking and connected home-type systems is the business model for service providers. You know the story. You can go out and buy a whole bunch of home networking gear from retail stores and install it in your home. Its point-to-point type technology, does some very handy, straightforward things, and it works very well at a good priceWhen you try to connect your home network to a trusted, secure network, like the ones where you find our digital set-tops, who’s going to handle the set-up, connections and management for all these additional devices? If a service provider does it and you can’t print your daughter’s term paper because the printer in the basement doesn’t work, and the service provider has to then send a truck, well there go all the profits for a year.That may be a bit of over-dramatization, but it’s the business equation. The business model isn’t there yet. However, we believe that controlling some of these things from the network will make it easier, and prevent some of those maintenance costs. Then Digital Rights Management (DRM), Bandwidth Availability, and Quality of Service can all be used to improve the consumer experience and protect the programmers’ rights. I like to use my house as an example of today’s technology. We have an Apple TV connected to our plasma HD set to use mostly for photographs. We have a half terabyte drive sitting behind the monitor on the desktop. My wife has an iPhone. All these things connect together. We move video back and forth, and it’s pretty painless. Apple has simplified those interfaces. Unfortunately the only connection to the network for these devices is iTunes over the broadband pipe, which limits the breadth of video access that is provided by the set top, which we all know is a network edge router!In the long-term, what the service providers want to do is simplify the transition of those interfaces, probably by controlling a lot of it from the network. And I’ll remind you that the edge of the network is the digital set-top. We have over 33 million Scientific Atlanta digital set-tops connected at the edge of the secure network. If you have enough smarts and enough CPU processing power at the edge, and you’ve got all the admission control and policy management in the trusted network, you can then reach out to these devices and you can start to control them in a much more efficient way.And I think the best example of that being done today with a simple interface is what Apple’s doing. We think that in the future, service providers are going to offer those kinds of services.

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  1. Thanks for this excellent compilation of companies operating in this space.